India’s Heavy Industries Minister Praful Patel said that the Indian automobile and auto component industry turnover will reach $145 billion by 2016 to account for more than 10 per cent of gross domestic product (GDP).
“The output of the automobile and auto component industry would reach $145 billion by 2016, accounting for more than 10 per cent of the country’s GDP and in turn generate employment for more than a million people,” Patel said in his address to the annual convention of Automotive Component Manufacturers Association of India (ACMA) held recently.
Patel advised the Indian auto component industry to invest more in research and development (R&D) for moving up the value chain and become globally competitive so as to increase exports through bilateral routes and regional free trade agreements (FTAs).
According to the minister, the growth of the industry has led the government to review targets set for the industry under the automotive mission plan 2006-16.
“As per the 12th Five Year Plan, the ministry is reviewing targets set up under the Automotive Mission Plan 2006-16,” Patel said. The auto component industry in India has witnessed robust growth over the last five years at 15 per cent compounded annual growth rate.
Meanwhile, Hero MotoCorp said it expects motorcycles sales to grow during the festive season after two straight months of fall in demand in line with the economic slowdown.“I am personally very hopeful that sales will turn positive in October after two slow months (July and August 2012),” Pawan Munjal, managing director and chief executive, said on the sidelines of annual convention of Automotive Component Manufacturers Association of India.
Sales of the two-wheeler major fell for the first time in many years as demand at the entry-level, best selling for motorcycles such as Splendor and Passion went down.
Hero MotoCorp’s sales fell one per cent in July and stood at 484,217 units from 491,036 units sold in the corresponding month of 2011. Last month, sales fell 12 per cent and stood at 443,801 units from 503,654 units sold in August 2011.
The two-wheeler major is also looking to clear inventories of unsold two-wheelers during the festive period.
“We are also glad that we have managed to put out stocks that the market requires during the festive season,” Munjal said. However, the company did not give sales forecast after the festive season.
“Thankfully, the fall in two-wheeler sales has happened much later than the rest of the economy. However, it is difficult to give a full year forecast as we have to wait and watch demand after festive season,” Munjal added.